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Purchasing Strategies - Questions & Success Stories
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I agree....I don't bring up invoice but if a customer does then it opens the door to overhead. As you know, some idiots think that if you have $1000 in gross profit its the same as net profit..
Now the big question what is the net profit on any particular car? That $1000 gross profit could be a $850 net profit and under the exact same conditions could be a $1,000 net loss, or anywhere in between. Ah cost accounting is just so much fun. :shades:
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Nobody is guaranteed to make a profit (unless you are the government and you DEMAND a profit) however, if they are in business and they sell a car for a profit, then what's the beef? What does it matter to you if I sell every single Civic I get in at a profit?
If you want one then you'll either pay the dealer a profit or you won't...it's as simple as that.
I don't understand where car buyers feel that they have the "right" to know everything that goes on in this business, and to tell a dealership that's spending millions each and every year HOW they should do their business.
I don't hear Snake caring about whether you make a profit or not. He's actually indifferent to it.
So am I. I want the lowest price that I can get, and if that means that the dealership loses money because it has some other priorities to meet, then so be it.
I use the invoice because it's useful information and provides leverage. If I need to reference it in a negotiation in order to gain that leverage, then of course, that's what I'm going to do.
No I wouldn't say that. I always have said that one should try to find out what the market price is for a particular car and try to match that. So in short I would only say you got hosed if a particular percentage of buyers paid a significantly lower price than you.
I have also stated that a fair profit for a dealer is whatever he can get on an open market. If they make 7 grand profit on a hot car so be it, if they lose their shirt on a slow mover no one wants too bad.
If you want one then you'll either pay the dealer a profit or you won't...it's as simple as that.
Nope, if you want one and the dealer wants to sell one they will agree on a price that, hopefully, will be what the market will bear. Now if the dealer makes a profit at that price then good for the dealer, if not oh well. Just don't sit there and give me a sob story on how your not making a profit.
I don't understand where car buyers feel that they have the "right" to know everything that goes on in this business
Maybe its because dealers have said "Hey I am selling to you at a loss, here look at our invoice" ever since Carl Benz sold the first car. Dealers have created that mess now they complain when it backfires.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Yeah but I bet Kark came back and said "what are you talking about there is only one car in the world and I have it"
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Two basic reasons:
-From a buyer's standpoint, a lower number is better than is a higher number. It's easier to get a lower price if the focus of the negotiation is on numbers close to yours, than it is to deal with numbers that are further away.
-Because it's closer to the dealer's cost than is the MSRP, and it's better for the buyer to be closer to that figure than further away. As a buyer, you are better off with the dealer receiving lower margins than you would be with higher margins, and the invoice surely does that.
Keep in mind that the dealership is well aware of the invoice price, so it certainly isn't irrelevant to them. From their standpoint, it's useful shorthand to help them know fairly quickly how much they can afford to give away.
Also, I must apologize for the "hosed" comment. I'm not against anyone making money fair and square. I saw the word being used quite frequently, and like a little kid using Daddy's naughty words, I put it in my post.
The key here may be in that number. If it's a few bucks, I wouldn't sweat it, but the doc fees are often set to generate more than a bit of profit for the dealer, and to convince you that the deal is better than it is.
Does getting old constitute a strategy?
tidester, host
I'm thinking of young people that look even younger, or maybe seniors? You do hear stories of 20 YOs getting broomed from a dealership (even though some of them really do have money to spend!), and senior citizens getting "ripped off" (not that being old has anything to do with your mental abilities or negotiating skills).
So, since much of negotiations (and poker FWIW) has to do with "reading your opponent" and trying to figure out their skill/experience level, isn't it possible that a salesperson would treat someone that seems to have a lot of experience different than a first time buyer? And if so, how does a buyer use that to their advantage?
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
That's precisely one reason to avoid storming into the dealership, wearing your warpaint and combat gear. Part of negotiation includes gathering information about the other side, and you won't get as much of it if you put the other side on its defenses from the start.
Age is one aspect of the picture, but of course, the seller is going to take whatever cues you send, make some judgments about you, and then act accordingly. That's why playing it a bit naive, without overdoing it, is a good way to begin your encounter, as it helps to create that "relationship" that the seller views as a positive milestone. Offering a Trojan horse of sorts will get you past their defenses more easily.
Very few people are master negotiators (and that includes car salesmen). But then again you only have to be a good negotiator to get a good deal on a car, its not like you're hammering out the Treaty of Mortefontaine.
Salesmen like Isell and buyers like Socal might be good negotiators and better than most, but they are not Henry Kissingers.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Bingo. Negotiation is not that tough (and most importantly, I don't have Kissenger's awful voice.)
The funny thing is that many of us were better negotiators when we were kids, but then rationalized it away as we got older. Your first negotiation likely occurred not long after you were born: You yelled to get what you wanted, then didn't give up until your demands were met. As you got older, you probably acquired a bit more finesse -- you probably routinely negotiated your bedtime, getting free stuff from Mom while out on a shopping trip and eventually worked your way to curfew times and car keys.
You were born with this stuff, it's just a matter of finding your inner kid and applying it to your product purchases. And it doesn't just apply to car buying, but to buying all kinds of products.
Well I wouldn't exactly say that. For most of us it wouldn't be, its not tough to negotiate a car purchase or a home, that sofa or anything else (I recently got 25% off an already marked down King sized bed in 10 minutes). There are very difficult negotiations out there but we will never run into them.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I’m Leasing a 2006 GX 470. MSRP 55,778, Invoice (inc. Dealer Advertising) 48,521.
Two Lexus dealers:
Dealer "A", I've bought one car, leased two others. This is my local dealer who does all the service on my cars. Last car I leased, however, there were around $1,200 in unexplained differences rolled into the lease, which I discovered after signing. The lease was redone and resigned.
I asked the fleet manager at Dealer “A” to construct the most aggressive deal he could on a new, loaded GX 470. He came in at $1,700 over invoice.
Dealer “B” is about 30 miles away. They’re a giant dealership, and generally they can outprice any dealer. I contacted the Internet Sales manager, proposed $375 over invoice, and they accepted. They also answered a ton of questions on leasing, were very quick and responsive, and generally felt like they were trying to earn my business. I did, however, discover a $50 “mystery” charge their computer leasing system was adding in that was also unexplained.
Now, in returning to Dealer “A”, their attitude was, “Oh, we can meet those numbers”.
But I figure that’s not really fair for them to “meet” the numbers of the other dealer — they have to do better. But how much better?
Dealer B says “Tell us what we need to do to make this deal. Would 2 years of free oil changes interest you?” I figured that wasn’t a big deal.
So I’m trying to deal with the dilemma: what is a reasonable counter-offer to Dealer “A” that makes it fair to go with one dealer over another? Do I owe EITHER dealer anything, period? Or is it all about the bottom line, period?
I'd go with Dealer B by telling them you'd like the oil changes and XXX price or whatever else. They've earned your deal with vigor. Double check their actual printout for the lease, however.
2014 Malibu 2LT, 2015 Cruze 2LT,
My belief is that if they give me their best deal they wouldn't be able to go lower than that. When dealer B tells me that they can beat dealer A I tell them to do so without telling them what the other deal is. If they give me their best deal and it beats dealer A then great, if it doesn't then either they cannot beat dealer A or they didn't give me their lowest price.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Obviously, Dealer A wasn't quite telling you the truth when he indicated that his offer was, in fact, his best and final. But that's par for the course, so I wouldn't particularly get upset over it.
I see no problem with getting into a bit of a bidding war of sorts, if you'd like. Or if you prefer, get one dealer to beat the other, not just match it.
I'd say that you buy from whomever has the car that you want. If they both do, then choose based upon whatever factor you prefer, i.e. service, proximity, quality of the coffee in the service department, it doesn't much matter. (I'd probably opt for the most convenient location, but that's me.)
But before you do anything, first do a bit of homework to check whether this price you've negotiated is optimal to begin with. (I'm not sure how you arrived at your original figure.) If you can shave more off of it, then do so.
He may have been telling the truth - it was his best and final offer - at that moment!
tidester, host
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Ladies and gents, may I introduce the emcee of the Inside Line Comedy Hour!
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2014 Malibu 2LT, 2015 Cruze 2LT,
Sounds to me like Dealer B worked to earn your business, and Dealer A is taking you for granted. Personally, I like to reward the dealer who genuinely gives a good deal from the beginning. That $1200 mystery charge from Dealer A would make me suspicious from then on.
Dealer B offering the good deal, plus the two years of oil changes (which maybe is not huge but it's not nothing, either - worth maybe $200 or so, maybe more, depending on how many miles you put on in a year. Make sure they agree to "free oil changes every 3,000 miles" or whatever your manual says.)
The $50 one from Dealer B still needs an explanation, of course, too. Still, on the whole he seems like a more up-front kinda guy.
Funny thing about those 2 year free oil changes the dealerships often hand out. They are based on 5,000-7,500 miles intervals as per manufacturers recommendation.
But, when not giving handouts...dealerships recommend or require oil changes every 3,000 miles. :sick:
The recommended intervals are getting longer than that. If I recall, BMW is advising oil changes every 15,000 miles, which is really pushing it, even with a synthetic.
Those free oil changes don't necessarily mean much. Make sure that they include a new brand name oil and a filter, and that it doesn't take weeks to get an appointment.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Recent BMWs don't even have a dipstick to check the oil levels. It's all done by computers and sensors to tell you if/when you need to add oil and when you need to change it.....not before.
Back to talking about sales strategies, I tend to gravitate towards the people who have been with the dealership for a while. They don't seem more willing to get to the "bottom line" quicker than the green peas who are still full of the "sales training" tactics that they were taught to practice last month. The more senior guys (and by senior, I don't mean the folks that have been there all of 3 months) seem to know that the quicker they can close the current sale, the quicker they can move on to the next.
I don't have the time, nor the patience to put up with the ones who haven't sold much, or recognize how to get a good deal done without doing the "dance".
LoL! Actually, it probably comes from having watched too many politicians parse words for too long.
Seriously, I pretty much agree with what others have said here - focus on the OTD price and be prepared to walk.
tidester, host
That ones way to easy.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
The flip side of getting the most seasoned salespeople, is they are presumeably the best at getting the most out of a buyer. I prefer the guy who has experience between the "green pea" and the seasoned salespeople.
2018 430i Gran Coupe
tidester, host
Remember that the service and sales departments are two different beasts. Your car won't get worse service just because you bought it at Dealer B. Keep going to Dealer A for your service if you've been happy with them. But buy from Dealer B.
And, while 2 years of free oil changes may only be at 7500 miles, when you'd normally do them at 3000, it's still free. My dealership gave me free nothing.
Total tax at 2.5% (great tax %)
Title $16.50
Doc. Prep. $199.50 (not great, but could be worse--another local had $279, while another had $99)
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tidester....that's probably the best advice given in this entire thread.....especially, the part about preparing to walk.
As far as a seasoned car pro or "green pea"? I've never wanted to "school" the green pea. I know they all have to start somewhere, but let them learn/practice their craft on someone else.
The last time I interfaced with a new sales person he pulled out his "4 square". By the time he got done writing down "THE OFFER" (along with the extra charges for etching, etc), he pushed it over to me for the "trial close". After I got done scratching out all of his numbers out and telling him none of that was acceptable to me....try again, he got the wounded puppy look on his face and actually said, "I don't know what to do, now". Nice enough kid and all, but finally I told him to bring the guy over from the "big desk" as we were gettting nowhere.
Man...that's pretty sad.